AB InBev is under pressure to pay off its $100 billion debt

Discussion in 'Beer News & Releases' started by Todd, Jul 29, 2019.

  1. Todd

    Todd Founder (5,646) Aug 23, 1996 California
    Staff Moderator Fest Crew

    https://www.cnn.com/2019/07/24/business/ab-inbev-debt-beer-ipo/index.html

    https://www.fool.com/investing/2019/07/28/anheuser-busch-inbev-opts-for-asset-sales-after-fa.aspx
     
    PapaGoose03 likes this.
  2. bbtkd

    bbtkd Poo-Bah (2,555) Sep 20, 2015 South Dakota
    Society Trader

    Tough business model; sell an extremely high quantity of a consistent and fresh, yet moderate quality product that is addictive and can lead to stupidity.
     
    #2 bbtkd, Jul 29, 2019
    Last edited: Jul 29, 2019
    JimboBrews54 likes this.
  3. islay

    islay Aspirant (278) Jan 6, 2008 Minnesota
    Trader

    Actions like dividend cuts and spinning off certain units likely was the plan all along when AB InBev did a leveraged buyout of SABMiller. It's a little surprising that it's taking so long, but these are far from signs of major troubles for AB InBev, and this is all standard post-mergers-and-acquisitions fare, albeit at very large dollar levels.

    I feel like a misleading picture is being painted of a spendthrift and irresponsible AB InBev that has gotten itself in mountains of debt through incompetence. In reality, it knowingly assumed massive debt in a strategic purchase that was and continues to be mostly supported by Wall Street analysts, and, ever since InBev purchased Anheuser-Busch, it has had a strong reputation as a lean and efficiently run company, albeit one in an industry facing some headwinds.
     
    ovaltine likes this.
  4. TrojanRB

    TrojanRB Meyvn (1,424) Jul 27, 2013 California
    Society Trader

    This is, as they say, “fake news”.

    I just pulled up their balance sheet, and it’s actually quite healthy.
     
  5. ovaltine

    ovaltine Poo-Bah (2,672) Apr 6, 2010 Indiana
    Society Trader

  6. Mark-Leggett

    Mark-Leggett Savant (914) Jul 30, 2014 Missouri
    Society

    Interesting. No matter what business you are in what worked great 10 years ago might not work now. Got always be working to stay relevant.
     
    Victory_Sabre1973 likes this.
  7. Oktoberfiesta

    Oktoberfiesta Aspirant (266) Nov 16, 2013 New Mexico

    "The hot spot for the past decade has been super-premium beer because the economy has been strong and consumers have been trading up," said Linda Montag, senior vice president at Moody's Investors
    -------------
    Do they all think like that? Super premium when worded in that fashion is more along the lines of what Corona is doing.

    They are upselling us on the notion that the quality is superior/matching the consumer price point. DFH and BP have tried to do that over the years with varying degrees of success. That may work in imports but good luck distributing new beer to my area with price points $2-3 higher than local main stays. The super premium angle is played out IMHO. Competitively priced QUALITY products are making a true return.
     
  8. JackHorzempa

    JackHorzempa Poo-Bah (4,096) Dec 15, 2005 Pennsylvania
    Society

    I suppose we will need to track this?

    It is not just Corona who is commanding higher prices for an AAL beer that happens to be brewed in another country (Mexico). Modelo Especial appears to have increasing sales figures and there are other examples of:
    • Dos Equis
    • Estrella Jalisco
    • etc.
    When Sierra Nevada created their new year-round beer of Sierraveza they were priced at 11 bucks a 6-pack at my local beer stores (even higher than their brands like SNPA, Torpedo). I thought this was crazy.

    Cheers!
     
    Spikester likes this.